Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: EL KABONG!!! who wrote (28021)	1/27/2003 11:26:37 PM
From: energyplay	of 74559

Kerry's summary is correct. Not every state is in deep trouble, but some of the big states, like California, are really is bad shape. Revenue in states with heavy sales taxes and/or progressive income taxes soared during the boom years. Many states do have room to cut services and raise taxes. The States affected will issue new bonds to cover the short fall, and banks and others will buy them with money supplied by the Fed at 1.75%. Monetizes the debt. Lots of noise in the meantime. May let one or more of the states flirt with BK, or at least have massive cut backs. Inflation later. Possible opportunity for buying state bonds near the bottom, or on the way up. Just need to call the bottom...;-)

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